House OKs 'dark money' bill

By David Saleh Rauf :
May 13, 2013
: Updated: May 13, 2013 10:12pm

AUSTIN — The Texas House on Monday tentatively passed a controversial proposal aimed at shining a light on secret campaign spending.

Senate Bill 346 takes direct aim at the cloak of anonymity that shields so-called dark money groups — those tax-exempt organizations whose donors spend big bucks to influence elections and ballot measures but have not been required to reveal who is behind the spending.

Under the proposal, nonprofits set up under section 501(c)(4) of the tax code would be required to publicly disclose contributors who pony up more than $1,000 to any dark money group that spends $25,000 or more on politicking. Labor unions are exempt.

Before Texas joins a small group of states already moving to yank secret donors out of the shadows, the proposal must clear a final vote in the House on Tuesday without being amended. Then, it still would have to get through Gov. Rick Perry, and it's uncertain whether the governor would sign it into law.

A Perry spokeswoman said Monday the governor will review the final bill if it hits his desk. However, the House lawmaker shepherding the proposal through the lower chamber speculated Monday that its fate could be all but sealed once it leaves the House.

The issue has been a political lightning rod since the U.S. Supreme Court's 2010 ruling in Citizens United vs. the Federal Election Commission. That decision paved a path for outside groups like super PACs and 501(c)(4)s to raise and spend unlimited sums from corporations, labor groups and deep- pocketed individual donors.

And while both 501(c)(4)s and super PACs can accept unlimited sums of cash, only super PACs are required to identify donors.

As a result, super PACs tend to set up sister outfits in the form of a 501(c)(4)s to funnel money anonymously to candidates or to fund attack ads. That's how they got the ominous title “dark money” groups.

In Texas, Geren estimated Monday, more than $600,000 in untraceable cash was pumped into state races during the most recent election cycle.

“The problem occurs when these groups wade deep into the political process and use a loophole to keep their donors secret,” Geren said.

The proposal tentatively passed the House without any of the drama that surrounded it in the Senate. Last month, the upper chamber voted 23-6 to approve the bill, only to come back one day later and reverse itself by asking the House to send it back to the Senate for another look. The House declined.

On Monday, Geren fought back several amendments. Had any of them passed, it would have required the bill to be bounced back to the Senate before heading to Perry's desk — a prospect Geren said would have doomed it altogether.

“If we amend it, it goes back to the Senate, where they have some cold feet,” Rep. José Menendez, D-San Antonio, said. “So if we want transparency, the best thing we can do is send it to the governor's desk without amendments.”

That didn't stop a handful of Republicans from trying to tack extra language onto the bill or trying to kill the proposal outright. Within seconds of the bill hitting the floor, a procedural move to have it scuttled was proposed.